What is Fraud Investigation & Defence?
Disputes with HMRC over suspected tax irregularities can lead to intensive investigations and significant legal exposure.
The reputational harm, financial risk, and procedural complexity can extend well beyond the individual or business initially targeted, impacting stakeholders, families, and entire organisations.
What is Checked in Fraudulent Tax Investigations?
HMRC views fraudulent tax arrangements—whether intentional or misunderstood—as a significant risk to public revenue. As a result, the government invests heavily in investigation and enforcement. These cases often involve years of records, extensive correspondence, and complex tax law.
We represent individuals, business owners, directors, and professionals facing allegations of tax misrepresentation, including:
- Non-disclosure of overseas income
- Misuse of tax avoidance schemes
- Misstated VAT or PAYE obligations
- Errors in corporate filings or personal self-assessments
Our team will help you respond appropriately to HMRC, correct errors if necessary, and defend you against enforcement measures, minimising the reputational damage and financial loss for your business.
Penalties You Can Face in Fraud Investigations
HMRC tax fraud investigations can affect every aspect of your personal and professional life. These cases often result in:
- Backdated assessments and interest
- Financial penalties and surcharges
- Public or regulatory scrutiny
- Asset freezing or seizure proceedings
Axis Solicitors can provide front-line representation and act as a buffer between you and HMRC. We liaise with investigating officers, respond to formal demands, and help you prepare for interviews, disclosures, or settlement discussions.
Our tax investigation solicitors are experienced in navigating high-stakes, technically complex cases that cross into international finance, accounting compliance, and structured tax planning. Whether you’re being questioned about underreported income, irregular deductions, or the use of a tax mitigation scheme, we work to protect your legal rights and secure the best outcome.
How Fraud Investigations Work in the UK?
Fraud investigations are formal enquiries conducted by UK enforcement authorities where there is suspicion of dishonest conduct resulting in financial or tax loss to the public purse or third parties. In a tax context, these investigations most commonly arise where HMRC believes a taxpayer has deliberately understated liabilities, concealed income, or misrepresented financial information.
Fraud investigations can affect individuals, directors, professionals, and businesses of all sizes. They are often intrusive, prolonged, and high-stakes, involving detailed scrutiny of financial records, correspondence, and decision-making over several years.
Who Conducts Fraud Investigations?
Depending on the seriousness, value, and complexity of the case, investigations may be led or supported by:
- HM Revenue & Customs (HMRC) – Fraud Investigation Service (FIS)
- Serious Fraud Office (SFO) – for high-value or international matters
- Crown Prosecution Service (CPS) – for criminal prosecutions
- City of London Police (ECU) – for specialist economic crime
- Financial Conduct Authority (FCA) – where regulatory and tax issues overlap
Each authority has different powers, procedures, and enforcement priorities, making early legal advice critical.
Need for Legal Defence
At Axis Solicitors, we provide expert legal defence in tax-related fraud investigations, from complex inquiries involving offshore arrangements to more specific issues such as VAT or income reporting discrepancies.
Our experts offer strategic guidance during every stage of the process—from pre-investigation reviews to formal HMRC proceedings. We also help clients trace, preserve, and protect assets in matters where HMRC initiates enforcement or asset recovery actions.
Fraud Act 2006
In tax-related contexts, the Fraud Act 2006 is frequently applied when HMRC believes a taxpayer has:
- Provided false information in returns or correspondence
- Failed to disclose relevant details that affect tax liability
- Abused a position of trust—such as within a business or finance function
Supporting charges may involve the use of documentation, third-party services, or systems designed to reduce declared income or inflate deductions.
Our legal team can help you challenge the application of the Act, explain discrepancies, or demonstrate that actions were based on reasonable belief or professional advice.
The maximum sentence under the Fraud Act 2006 is 10 years where it applies, but not all tax matters result in prosecution. Our solicitors are highly experienced in challenging these measures and securing the best outcomes.
Legal Support For Victims of Fraud
Businesses and individuals impacted by internal financial misconduct may face tax consequences. If a rogue employee or third party has manipulated financial data, the tax liabilities fall on the organisation. We support clients in:
- Conducting internal investigations
- Tracing lost funds and recovering assets
- Disclosing to HMRC to prevent further penalties
- Seeking court orders to freeze assets or obtain evidence
This is especially important where tax filings have been compromised by internal misrepresentation.
Fraud Defence for Defendants
We provide robust legal defence for clients facing HMRC action for suspected tax fraud. Whether the dispute involves self-assessment, corporate taxes, PAYE, or VAT, we handle:
- HMRC interviews under caution (PACE)
- Voluntary disclosures under COP8 or COP9
- Settlement negotiations and litigation
- PR and reputational risk management
We’re particularly experienced in handling dual-track cases—where civil and financial enforcement proceed in parallel. Our goal is to reduce liabilities, protect your assets, and resolve disputes with minimal disruption.
Fraud Defence Specialisations
Serious High-Value Fraud
We regularly represent clients in high-value tax disputes involving six- or seven-figure liabilities. These may relate to offshore investments, dividend planning, or complex accounting strategies. We take a forensic approach to understanding the facts, the financials, and the legal framework.
Investment Fraud
Clients involved in investment structures later flagged by HMRC may be accused of benefiting from misrepresentations. We defend against these allegations and support with appeals, interest challenges, and negotiated repayments.
Tax Evasion
Whether HMRC alleges understatement, concealment, or incorrect declarations, we defend clients who are either under suspicion or formally investigated. We provide guidance throughout COP9, prepare detailed responses, and negotiate settlements where appropriate.
Other Fraud Offences
How the Outcome of Fraud Investigation Decided?
The maximum sentence under the Fraud Act 2006 is 10 years where it applies, but not all tax matters result in prosecution. The severity of outcome depends on:
- The amount of tax at issue
- Whether disclosure was voluntary
- The taxpayer’s cooperation
- HMRC’s assessment of intent or negligence
We work to limit penalties and prevent matters from escalating to enforcement or prosecution wherever possible.
Types of Fraud Allegations You Can Face
Tax-Related Fraud Allegations
- Investigations into underreported income, inflated expenses, or undisclosed assets
- Allegations involving misuse of tax avoidance or mitigation schemes
- Disputes relating to VAT, PAYE, corporation tax, or self-assessment filings
Corporate and Director-Level Fraud
- Allegations against company directors or managers for financial misrepresentation
- Investigations involving corporate structures, accounting practices, or group tax planning
- Exposure to civil penalties, director disqualification, or parallel regulatory action
Fraud Act 2006 Offences
- Accusations of fraud by false representation, failure to disclose, or abuse of position
- Cases where HMRC or prosecutors allege deliberate dishonesty rather than negligence
- Defence against criminal charges carrying potential custodial sentences
VAT and Indirect Tax Fraud
- Investigations into VAT returns, missing trader (MTIC) or carousel fraud allegations
- Disputes arising from complex supply chains or disputed VAT classifications
- Enforcement action involving assessments, penalties, or repayment demands
Associated Financial and Economic Crime
- Matters overlapping with money laundering, source of funds, or crime concerns
- Mortgage, insurance, or investment fraud allegations linked to tax investigations
- Multi-agency investigations involving HMRC, FCA, CPS, or the SFO
Your Rights & Legal Position During Fraud Investigation
Legal Rights During an Investigation
- Right to independent legal representation at every stage of fraud investigation
- Protected against self-incrimination and are not required to volunteer information
- Investigators must act within statutory powers and follow due process
HMRC Powers and Investigation Limits
- HMRC can request information, but those requests must be lawful and proportionate
- Search warrants, dawn raids, and seizures are subject to strict legal thresholds
- Decisions and notices issued by HMRC can be challenged or appealed
Interviews Under Caution (PACE)
- Interviews under caution must comply with the Police and Criminal Evidence Act (PACE)
- Anything said during interview may be used in civil or criminal proceedings
- Legal preparation and representation significantly reduce the risk of escalation
Disclosures, COP8 and COP9 Procedures
- HMRC may invite voluntary disclosure under COP8 or Code of Practice 9 (COP9)
- COP9 involves the Contractual Disclosure Facility (CDF) and allegations of deliberate conduct
- Early legal guidance is essential to manage risk and protect your position
Asset Freezing and Financial Protection
- HMRC may seek to freeze accounts or restrain assets during serious investigations
- Confiscation action may follow under the Proceeds of Crime Act (POCA)
- Legal challenge can preserve access to funds and prevent disproportionate enforcement
